This is the Cato Daily Podcast for Wednesday, October 15, 2008.

I'm Caleb Brown.

Just about every day now a new federal intervention is readied in Washington, D.C.

to contain the leftover and growing fiscal crisis not addressed by the previous federal intervention.

The latest, a massive federal purchase of preferred shares in nine of the largest and healthiest banks in America.

Heto Institute Chairman Emeritus William Niskanen yesterday commented on the plan,

the lessons for libertarians in the financial crisis fallout.

Is one of the lessons that libertarians ought to learn is that certain government

intervention at certain points in time have an overpowering

seductive feature that is almost impossible to avoid?

That may be true although I don't quite understand how requiring the nine

biggest healthy banks to sell preferred shares to the Treasury in combination with the compensation of their

executives being limited. I don't understand why that triggered a big run, a big increase in the

stock market. I'm puzzled about why that particular action triggered a big increase in the

stock market.

Okay. Well, I mean, we could debate why the markets go up and down based on what part of the news they're actually paying attention to.

Well, that's right. and we're getting we're getting

major news every day and much of which was not anticipated when this huge bailout

bill was passed. The Treasury has talked initially about buying a bad

mortgage paper from American banks. Then they said they might buy bad mortgage

paper from some foreign banks. Now they're talking about buying or

compelling the purchase of preferred shares from American banks and they have agreed they have finally got the nine

...